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Diamondback Energy, Inc. (FANG - Free Report) reported first-quarter adjusted net income per share of $1.39, above the Zacks Consensus Estimate of $1.36 on strong production. In more good news for investors, the energy explorer unveiled a new $2 billion share repurchase scheme through year-end 2020. Further, following up on its earlier announcement, the company raised its quarterly dividend by 50% to 18.75 cents per share (or 75 cents per share annualized).
However, the bottom line fell from the comparable 2018 period profit of $1.64 on lower realized prices. The Permian pure play’s total revenues of $864 million came below the Zacks Consensus Estimate of $875 million but increased more than 80% year over year.
The company saw its first-quarter adjusted EBITDA of $651 million increase 91% from $341 million a year ago.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
The production of oil and natural gas averaged 262.6 MBOE/d (68% oil), up 156% from last year and slightly ahead of the Zacks Consensus Estimate of 261.8 MBOE/d. Diamondback’s oil production surged 137% year over year, while natural gas volumes more than tripled. The 2018 purchases of Energen Corporation and Ajax Resources has transformed Diamondback into one of the leading Permian Basin oil producers.
The average realized crude oil price during the first quarter was $46.12 per barrel, representing a decrease of 25.2% from the year-ago realization of $61.64. Moreover, the average realized natural gas price during the March quarter of 2019 was $1.32 per thousand cubic feet (Mcf), down 39.4% from the year-ago period. Overall, the company fetched $35.63 per barrel compared with $50.52 a year ago.
Expenses
First-quarter cash operating cost was $8 per barrel of oil equivalent (BOE), down from $8.38 per BOE in last year’s corresponding period. Diamondback’s cash G&A expense came in at 55 cents, falling from 96 cents incurred in the first quarter of 2018. However, lease operating expense of $4.61 was up 14.1% year over year. Meanwhile, production taxes fell 21.3% to $2.33 per BOE. The company shelled out $533 million on drilling, completion and non-operated properties, while infrastructure and midstream budget was $94 million.
Financial Position
As of Mar 31, 2019, the Permian-focused operator had $126 million in cash and cash equivalents, while having long-term debt of $4.7 billion. At the end of the quarter, Diamondback, which also has other oil and gas-related operations through Viper Energy Partners L.P. (VNOM), had $1.9 billion undrawn credit facility.
Lowers Full-year Production, LOE Guidance
The company disclosed that it agreed to sell non-core Permian assets (some of it acquired during the Energen transaction) worth $322 million during the quarter. The sale – expected to be complete by Jul 1 – prompted Diamondback to revise its guidance for 2019.
The company is now forecasting full-year output range of 272-287 MBOE/d, of which 68-70% is oil. The earlier prediction was for production between 275 MBOE/d and 299 MBOE/d. Further, management lowered this year’s lease operating expense guidance to $4.25-$4.75 per BOE as against $4.50-$5 before.
Zacks Rank & Stock Picks
Diamondback Energy holds a Zacks Rank #3 (Hold).
Meanwhile, investors interested in the energy space could look at some better options like ProPetro Holding Corp. (PUMP - Free Report) , Continental Resources, Inc. and Apache Corporation (APA - Free Report) that sport a Zacks Rank #2 (Buy).
The 2019 Zacks Consensus Estimate for Midland, TX-based ProPetro is $2.53, representing some 26.5% earnings per share growth over 2018. Next year’s average forecast is $2.80 pointing to another 10.5% growth.
Over 30 days, the Oklahoma City-based Continental Resources has seen the Zacks Consensus Estimate for 2019 and 2020 increase 25.6% and 17.9%, to $2.80 and $3.49 per share, respectively.
Apache has a 100% track of outperforming estimates over the last four quarters at an average rate of 31.1%.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Diamondback (FANG) Q1 Earnings Beat, Unveils $2B Buyback
Diamondback Energy, Inc. (FANG - Free Report) reported first-quarter adjusted net income per share of $1.39, above the Zacks Consensus Estimate of $1.36 on strong production. In more good news for investors, the energy explorer unveiled a new $2 billion share repurchase scheme through year-end 2020. Further, following up on its earlier announcement, the company raised its quarterly dividend by 50% to 18.75 cents per share (or 75 cents per share annualized).
However, the bottom line fell from the comparable 2018 period profit of $1.64 on lower realized prices. The Permian pure play’s total revenues of $864 million came below the Zacks Consensus Estimate of $875 million but increased more than 80% year over year.
The company saw its first-quarter adjusted EBITDA of $651 million increase 91% from $341 million a year ago.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
Diamondback Energy, Inc. price-consensus-eps-surprise-chart | Diamondback Energy, Inc. Quote
Production & Realized Prices
The production of oil and natural gas averaged 262.6 MBOE/d (68% oil), up 156% from last year and slightly ahead of the Zacks Consensus Estimate of 261.8 MBOE/d. Diamondback’s oil production surged 137% year over year, while natural gas volumes more than tripled. The 2018 purchases of Energen Corporation and Ajax Resources has transformed Diamondback into one of the leading Permian Basin oil producers.
The average realized crude oil price during the first quarter was $46.12 per barrel, representing a decrease of 25.2% from the year-ago realization of $61.64. Moreover, the average realized natural gas price during the March quarter of 2019 was $1.32 per thousand cubic feet (Mcf), down 39.4% from the year-ago period. Overall, the company fetched $35.63 per barrel compared with $50.52 a year ago.
Expenses
First-quarter cash operating cost was $8 per barrel of oil equivalent (BOE), down from $8.38 per BOE in last year’s corresponding period. Diamondback’s cash G&A expense came in at 55 cents, falling from 96 cents incurred in the first quarter of 2018. However, lease operating expense of $4.61 was up 14.1% year over year. Meanwhile, production taxes fell 21.3% to $2.33 per BOE. The company shelled out $533 million on drilling, completion and non-operated properties, while infrastructure and midstream budget was $94 million.
Financial Position
As of Mar 31, 2019, the Permian-focused operator had $126 million in cash and cash equivalents, while having long-term debt of $4.7 billion. At the end of the quarter, Diamondback, which also has other oil and gas-related operations through Viper Energy Partners L.P. (VNOM), had $1.9 billion undrawn credit facility.
Lowers Full-year Production, LOE Guidance
The company disclosed that it agreed to sell non-core Permian assets (some of it acquired during the Energen transaction) worth $322 million during the quarter. The sale – expected to be complete by Jul 1 – prompted Diamondback to revise its guidance for 2019.
The company is now forecasting full-year output range of 272-287 MBOE/d, of which 68-70% is oil. The earlier prediction was for production between 275 MBOE/d and 299 MBOE/d. Further, management lowered this year’s lease operating expense guidance to $4.25-$4.75 per BOE as against $4.50-$5 before.
Zacks Rank & Stock Picks
Diamondback Energy holds a Zacks Rank #3 (Hold).
Meanwhile, investors interested in the energy space could look at some better options like ProPetro Holding Corp. (PUMP - Free Report) , Continental Resources, Inc. and Apache Corporation (APA - Free Report) that sport a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The 2019 Zacks Consensus Estimate for Midland, TX-based ProPetro is $2.53, representing some 26.5% earnings per share growth over 2018. Next year’s average forecast is $2.80 pointing to another 10.5% growth.
Over 30 days, the Oklahoma City-based Continental Resources has seen the Zacks Consensus Estimate for 2019 and 2020 increase 25.6% and 17.9%, to $2.80 and $3.49 per share, respectively.
Apache has a 100% track of outperforming estimates over the last four quarters at an average rate of 31.1%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>